5 Years Fixed Deposits: Tax Benefits & Higher Returns

While investing your money in any of the saving plan or policy the main concern of yours is saving tax as well gaining good returns on your investment. You are always in search of those plans and saving schemes, which will give you higher returns along with tax benefits. It is a kind of double benefits combo. When you invest in any policy or mutual fund you can claim the tax benefits,  but there is no surety of assured returns on your investments.

Besides, fixed deposit is one such financial tool, which helps in gaining good returns and at the same time claiming tax benefits. The rate of interest in fixed deposit is higher as compared to other saving plans. 5 years fixed deposit is also known as tax saver deposits. These kinds of fixed deposits give you advantage to claim tax benefits on the amount you saved under this scheme. However, these fixed deposit account is similar to any other fixed deposit, but the lock in period for this deposit will be minimum 5 years or more. This is the only kind of fixed deposit, which offers you tax benefits. You can claim the tax benefits under Section 80C of maximum up to Rs. 1.50 lakhs per annum.

Special features of 5 years tax saver fixed deposit

Here are some of the special features of the five years fixed deposit account.

  • Tax saving fixed deposit
  • Minimum lock in period of 5 years
  • There is no premature withdrawal with five year fixed deposit accounts
  • Fixed deposit rate of interest depends upon the respective bank offering the interest
  • There is no sweep in or overdraft facility available for these account
  • You can renew the account after completing the 5 years tenure for next five years
  • The interest earned on the principal amount is fully taxable
  • The tax is deducted under the Section 80 C of income tax. It is deducted on the basis of your annual income and taxable range. If you fall under slab of 10% tax your tax on FD will be deducted on the same range.
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Five years fixed deposit interest rate

The interest rate of this five years fixed deposit is compounded monthly/quarterly/half-yearly/yearly.  The rate of interest of fixed deposit may vary from bank to bank.

Interest rate for Fixed deposit of leading banks

Bank NameRegular DepositorSenior Citizen 
Axis Bank7.25%
HDFC Bank7.50% - 8.00%-----
ICICI Bank7.35%8.6%
SBI7.00%7.25%
Punjab National Bank7.50%8.00%

Documents required for opening fixed deposits

Eligibility: He/She should be Indian residents

Identity proof:

  • Passport
  • PAN card
  • Voter ID card
  • Driving licence
  • Government ID card
  • Photo ration card
  • Senior citizen ID card

Address proof:

  • Passport
  • Electricity bill
  • Telephone bill
  • Bank statement with cheque
  • Certificate/ID certificate

Personal Loan Interest Rates November 2018
Bajaj Finserv10.99% - 16.00%
Fullerton India14.00% - 33.00%
HDFC Bank11.25% - 21.50%
ICICI Bank10.99% - 18.40%
IndusInd Bank10.99% - 16.00%
Kotak Bank10.99% - 20.99%
RBL13.00% - 18.00%
Standard Chartered Bank12.00% - 17.00%
Tata Capital10.99% - 18.00%
Home Loan Interest Rates November 2018
State Bank of India/SBI8.70% - 9.25%
HDFC8.80% - 9.60%
Bank of Baroda8.65% - 9.65%
LIC Housing8.70% - 9.05%
PNB Housing Finance9.00% - 13.00%
ICICI Bank9.00% - 9.25%
Axis Bank8.80% - 9.05%
Citibank9.00% - 9.85%
Indiabulls Housing Finance Limited8.80% - 11.05%
Kotak Bank8.90% - 8.75%
DHFL9.05% - 9.95%
Reliance Home Finance8.75% - 14.00%